Every now and then BusinessWeek profiles a company they consider outstanding at the time. The strange thing is, stocks featured prominently in the magazine have a curious tendency to become duds in the short term — not because the companies are bad, but it has a contrarian-investment flavor to it.
You know Nike, right? The legendary stock trader who, after decades of navigating the markets, casually drew a swoosh and founded the company. The name means “endurance and perseverance” — stay patient and things will turn around. Pretty apt. But I’ve gotten sidetracked!
Yes, stocks with magazine coverage often follow a pattern that resembles… the Nike swoosh. A sharp drop after the publicity, before eventually recovering.
All that aside — so how do you actually pick stocks?
- Sort first: Group the ones that have already surged, and separately group those that haven’t moved yet.
- Spread capital: Put a portion of your capital into the ones that haven’t moved yet.
- For those that have already surged: Wait about 1–2 months. After a corrective pullback, gradually spread your remaining capital into those as well.
This is a conservative approach. Whether you make a lot or a little is mostly luck, but the odds of making something should be fairly high.
If you want those 5x or 10x returns, this method won’t do it. You’d need to put everything on a single bet — higher risk, and you’d have to assess that yourself. Unless you have very reliable inside information (sensitive topic).
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